March 23, 2023

Chinese Economic Growth Slipped Again in 4th Quarter

BEIJING — China’s economy slowed further in the fourth quarter of 2011, the government reported, lowering the growth in gross domestic product for the year to 9.2 percent, from 10.4 percent in 2010.

The gross domestic product grew at an annual rate of 8.9 percent in the last three months of the year, down from 9.1 percent in the third quarter of last year. It was the slowest pace since the second quarter of 2009, when the rate was 7.9 percent.

Economists had forecast that the rate of growth could drop to as little as 8.5 percent for the quarter as a slowing global economy cooled demand for Chinese products and the government’s inflation-fighting measures clamped down on domestic expansion.

Industrial production increased 12.8 percent in December compared with the same period a year earlier, the national Statistics Bureau stated. A Bloomberg survey of economists had predicted a 12.3 percent increase, which would have been the smallest in more than two years.

“It all looks pretty robust, I have to say,” Arthur Kroeber, the managing director of Dragonomics, an analytics firm in Beijing, said by telephone. “Export growth has been slowing and we’ll expect that to continue because Europe is just dreadful, and that’s China’s best export market. But even with those kinds of negative factors in the mix, the basic structure of the economy is still O.K.

“Things are slowing. But they’re not falling off a cliff.”

That said, he and most other analysts said that they expected a sharper deceleration in 2012, in part because of the bleak outlook for exports and the scant indication so far that Chinese leaders are making a serious effort to shift their economy from its export base to one driven by domestic consumption.

Improving domestic demand is crucial to stable economic growth, Jing Ulrich, the chairman of China global markets at JPMorgan Chase, said in a report issued on Tuesday.

“The government appears more inclined to support the economy by boosting wages and enacting tax reductions,” the report said. “There is considerable scope to support domestic demand by boosting income growth, and by reducing the tax burden for both companies and individuals.” 

Mr. Kroeber said his firm believed that annual growth in 2012 could cool to as little as 8 percent.

Chinese regulators have alternated in the last year between pumping up the economy and deflating it. External factors like the European debt crisis kept export demand unpredictable, and domestic influences like China’s red-hot property markets balked at attempts to control them.

The government finally began to cool property prices in the second half of 2011 after sharply curbing lending to prospective homebuyers and forcing banks to set aside more money in reserve. But at year’s end, regulators began to reverse course, lowering bank reserve requirements to stimulate lending after exports began to sag.

Their challenge in the next year is to stimulate the economy enough to maintain stable growth without worsening some of the problems that began to appear when G.D.P. was barreling ahead in 2010 and early 2011, said Alistair Thornton of IHS Global Insight in Beijing.

In particular, he said, encouraging more lending by the state-controlled banking sector — one of the government’s principal economic levers — risks a further buildup of local government debt, which some say is already at worrisome levels, and reigniting inflation, a serious worry in mid-2011.

More lending also could reinflate the property market that many say already was becoming a bubble before the government sharply reduced lending last year.

The figures released Tuesday show that fixed-asset investment in real estate, a key measure of the property market, dropped sharply in December. But even so, investment rose at a torrid 27.9 percent rate for the last 12 months.

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U.S. Vehicle Sales Soared Nearly 10% in September, Despite Economic Gloom

All three of the Detroit automakers reported gains, led by a 27.2 percent year-over-year increase for Chrysler, which outsold Toyota for the fourth time this year.

Toyota and Honda again trailed the rest of the industry, even though September was the first month since the March earthquake and tsunami in Japan that all of their plants were running at full capacity. Toyota’s sales dropped 17.5 percent, and Honda’s were down 8 percent. In contrast, Nissan sales increased 25.3 percent.

The industry’s seasonally adjusted, annualized selling rate rose to 13.1 million, the first time since April that they had exceeded 13 million. General Motors and Ford Motor each said they still expected total sales for 2011 to top 13 million, which would require demand to jump further in the fourth quarter.

Auto executives and analysts said shoppers had not been dissuaded by a declining stock market, bleak consumer confidence surveys, a sluggish housing market or high unemployment. Bigger discounts offered by some brands have helped, as have new offerings like the Chevrolet Sonic, a subcompact car, and a bevy of redesigned models from Chrysler.

“I don’t know of any other month where we had positive gains in auto sales with all of those negative factors,” Jesse Toprak, vice president for industry trends and insight at, which tracks sales and pricing. “The automakers might be convincing some consumers who may not be so eager to spend their money to buy a car because the product is so compelling.”

Mr. Toprak said more consumers also were showing up at dealerships because their current vehicle had outlived its useful life and they had no choice but to buy a replacement. High used-car prices are prompting some in that situation to buy a new one instead.

“As long as things remain relatively stable, even in the face of persistently high unemployment, we’re going to consistently see slow growth,” Don Johnson, G.M.’s vice president for United States sales operations, said in a conference call. “Right now, the pent-up demand due to age of vehicles is what’s keeping this nice, steady, slow growth going.” G.M. sales increased 19.7 percent in September over a year ago.

Falling gas prices helped persuade more shoppers to buy pickup trucks and other larger vehicles. Sales of light trucks, including sport utility vehicles and minivans, rose 16.1 percent, while passenger cars were up 3.4 percent.

Sales of full-size pickups, which typically fare best when the construction industry prospers, surged 46 percent at Chrysler and 33 percent at G.M. Ford, whose sales were up 9 percent over all, sold 18 percent more light trucks but 8.7 percent fewer cars.

At Chrysler, September was the 18th consecutive month of year-over-year sales growth. It reported a 24.3 percent gain for its Jeep brand of S.U.V.’s.

“Irrespective of the economy, strong products equal strong sales,” Reid Bigland, Chrysler’s head of United States sales, said in a statement. “There is no double-dip downturn going on around here.”

Another carmaker with considerable momentum is Nissan, which experienced relatively minor disruptions from the Japan disaster. Nissan sold 68 percent more of its subcompact car, the Versa, and its midsize sedan, the Altima, has outsold the Honda Accord so far this year.

In addition, the Nissan Leaf, an electric car, added to its sales lead over the Chevrolet Volt, G.M.’s plug-in hybrid. Nissan sold 1,031 Leafs to G.M.’s 723 Volts, but G.M. officials said they were still ramping up production while expanding sales to dealers nationwide.

For Toyota and Honda, even though plants are running at full speed, inventories are expected to remain below prequake levels until early next year. But dealerships said they were finally able to meet most shoppers’ needs again, rather than just taking an order or hoping the customer came back later.

“It’s beginning to feel like normal, almost,” said Adam Skolnick, the general manager at Toyota of Watertown, near Boston. “We have plenty of cars on the lot, and I’m anticipating many, many more coming in the next 45 days or so.”

Mr. Skolnick said the arrival of the redesigned Toyota Camry  sedan a week ago was helping the dealership make a quick recovery. For September, Camry sales fell 19.2 percent, but it was the industry’s top-selling car.

“It’s been like a bakery here, with people taking numbers to see the car,” Mr. Skolnick said. “It makes it feel fun again.”

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